FTAdviser.com

Advertising

According to the Council of Mortgage Lenders (CML), the proportion of borrowers taking out fixed rate products increased to 59 per cent in April, from 54 per cent in March.

This is the largest proportion since December last year, despite the fact that fixed rate application fees have rocketed. (See story.)

CML director general Michael Coogan said: "There has been a resurgence of fixed-rate lending as borrowers are seeking certainty. This trend is likely to continue as the anticipation of future Bank base rate cuts has diminished."

The CML also said there were clear signs of lenders tightening lending criteria in the face of ongoing funding constraints and a softer house price outlook.

The average first-time buyer put down a deposit of 13 per cent in April, the highest level in over three years. They also typically took out loans for 3.3 times their income, down from 3.35 times in March.

The average home mover loan was 2.96 times their income, down from three-times their income in March.

April saw a monthly increase in lending volumes with gross lending increasing by 8 per cent to £26.1bn, up from £24.1bn in March, after consecutive months of decline. However ,this was still 5 per cent down from a year ago.

There were 50,700 loans for house purchase worth £7.7bn in April, up 9 per cent in volume and 10 per cent in value from March.

For first time buyers, there were 18,500 loans granted in April, up 4 per cent from March, but 36 per cent lower than April last year.

There were 32,300 loans to home movers, up 13 per cent from March, but 38 per cent lower than April 2007.

Remortgaging accounted for 42 per cent of gross lending in April with 83,000 loans worth £11bn, up 14 per cent in volume and 11 per cent in value from March.

Coogan said: "Monthly house purchase lending volumes continue to be lower than last year’s levels and there will be a further weakening in coming months as recent approvals data has shown.

"The squeeze on mortgage funding has led many lenders to tighten their lending criteria. While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market."